Socially Responsible Investment: A New Generation’s Torch

Contributed by Alana Elsner

“Who is a better businessperson- Donald Trump or Mother Theresa?” someone once asked me. “Donald Trump, of course,” was the obvious answer. “No, Mother Theresa,” he replied. With smug smile that comes from stumping someone, he listed her achievements including bringing record donations not only to Calcutta but also to the Catholic Church. And her name and face were as recognizable as Michael Jordan’s- remember this was the 90s. She was perhaps the first of the modern day chariteurs- entrepreneurs bringing business-like basics to charity.

For years, philanthropy has been the responsibility of the government, international and non-governmental organizations, and of religious charities. But through scandal and research we learned that charity is not always as it seems. Enter the modern day heroes and heroines, leaving jobs at top financial firms and learning to serve the poor. This new generation of do-gooders is finally being recognized for their dedication to philanthropy, as noted in sources including recent New York Times editorials and Bill Clinton’s new book, Giving.

For example, take Shari Berenbach, the Calvert Social Investment Foundation’s Executive Director. She began her career holding various roles in the private sector at financial institutions including Citibank and Salomon Brothers. Now she heads Calvert, whose mission statement vows to create a new generation of sustainable, market-based strategies to alleviate poverty.

The Calvert Organization, sister to a $15 billion investment group, looks at macro economic effects of poverty. They use basic market-based approaches of supply and demand to create sustainable giving initiatives. By offering critical services to the poor like water, health, and housing, the Calvert Group emphasizes the ripple effect these services create. The theory is that, once these basic necessities are provided, they will create demand for business and growth in communities.

Other philanthropic organizations are also heeding the call of efficient and effective philanthropy. For example, the First Book Foundation was created after its founders learned about a study that concluded that the number of books in a home affects a student’s academic performance. PATH– an organization combating illness in impoverished areas- uses free market principles, going where they are most needed. They pair private health sector technology and services with poor areas that have a high demand for new health technology. Additionally, the Community Reinvestment Fund accesses capital on behalf of distressed communities in America, keeping the land of opportunity alive through investment.

These groups are no longer catering to what feels good or what looks good in helping the less fortunate. Instead, they take an innovative business approach. First they identify a problem. Then, they use basics of good business to create a sustainable charity. This new breed of do-gooders keeps their 90-hour work week, not for the money, but for the chance to make a difference in the world. They realize that the old system of philanthropy is broken, and continuously search and create new paths towards alleviating poverty and suffering in the world.